DeCicco: Transportation GHG reduction policy should focus upstream on fuel supply rather than downstream on choice of fuels in vehicles

25 January 2013

In a new working paper, Prof. John DeCicco at the University of Michigan argues that to reduce transportation sector greenhouse gas emissions, the proper policy focus should be upstream in sectors that provide the fuel, rather than downstream on the choice of fuels in the automobile.

More specifically, he suggests that other than supporting fundamental R&D, programs to promote alternative fuel vehicles (AFVs) “are not currently warranted for climate protection. In addition to managing travel demand and improving vehicle efficiency, the implied climate policy priority is limiting net GHG emissions in fuel supply sectors.” The paper is available from the Social Science Research Network (SSRN).

DeCicco notes that analyses of limiting transportation GHG emissions generally start with three main factors—travel demand; vehicle efficiency; and fuel characteristics—and then focus on particular combinations of vehicle types and alternative fuels for reducing emissions.

A deeply embedded set of assumptions underpins the nearly universal recommendation for policies to foster adoption of alternative fuels and vehicles (AFVs), meaning non-petroleum fuels and vehicles capable of using them. Extensively researched and variously subsidized over the years, AFV options include: electricity (for battery cars or plug-in hybrids), hydrogen (for fuel cell cars), natural gas, and bioenergy, including ethanol and other biofuels that can be used in combustion engines or as a renewable feedstock for producing electricity or hydrogen. Most studies identify AFVs as one of the “three legs of the stool” for transportation climate policy that, along with vehicle efficiency and travel demand reduction, are essential for reducing emissions.

This paper takes a fundamental look at the situation, independent of particular technology options, in order to critically examine established approaches. It deliberately analyzes the sector only from a GHG emissions perspective, rather than from the politically more popular perspective of reducing oil dependence, to parse out how policy priorities for climate protection might differ from those of energy policy.

In the paper, DeCicco decomposes GHG emissions from cars into factors amenable to measurement and analysis: travel demand activity (e.g., VMT); vehicle energy intensity (e.g., kJ/m); and net GHG emissions impact per unit of fuel energy consumed by the vehicles (e.g., gCO2e/MJ). This relationship can be viewed as an application of the Kaya equation to auto sector GHG emissions, he notes. (Earlier post.)

DeCicco then normalized the factors relative to current conditions, and, as an illustrative example, plotted existing systems relative to a target curve (right). The chart highlights the importance of the fuel system on the GHG impact of any AFV option—a conclusion also reached by some other conventional scenario analyses.

The challenge is illustrated for electric cars, which are roughly three times as fuel efficient as conventional, non-hybrid gasoline cars. Per unit of delivered energy, however, the US electric grid is on average about twice as carbon intensive as gasoline. BEV GHG emissions work out to 40% lower than a comparable gasoline car’s for the contemporary example plotted...For a BEV fleet to achieve an 80% emissions reduction, the US electric power system would have to be about 85% less carbon intensive than it was in 2005. A parametric analysis by Barter et al. (2012) also identified the challenges of achieving large GHG reductions with BEVs in comparison to improved efficiency gasoline vehicles.

—“Factor Analysis of Greenhouse Gas Emissions from Automobiles”

This normalized approach enables the exploration of the trade-offs among factors involved in limiting auto sector GHG emissions, DeCicco notes. Using trends and projections for the factors to achieve an 80% reduction in GHG from the sector for the US market, DeCicco found:

For the case of halving energy intensity and doubling VMT, the result is quite simple—if an 80% reduction of auto sector GHG emissions is desired, then an 80% reduction from the fuel system is needed for the net GHG emissions impact of the fuel system that supplies the sector.

Tripling fleet efficiency against a doubling of demand growth still requires a 70% reduction form the fuel system.

Trimming VMT growth by 25% only changes the degree of fuel system GHG reduction needed from 80% to 75%.

While the particular values change, the general conclusion is that a stringent limit for total auto sector GHG emissions requires a limit of similar stringency for fuel system GHG impact. Of course, a higher level of fuel economy with lower travel demand would relax the constraints on the fuel system, e.g....62% below its current level, but that still entails a major GHG impact reduction.

...This analysis underscores the importance of limiting net GHG emissions of the fuel supply system, an inference that is not necessarily inconsistent with the traditional promotion of alternative fuels for climate policy. However, it highlights two points: (1) the use of alternative fuels per se does not limit GHG emissions from their supply systems; and (2) addressing fuel system GHG impacts does not necessitate alternative fuels, i.e., different end-use energy carriers for vehicles. Point (1) is self-evident. For point (2), a counterexample is the set of options for balancing the CO2 emissions from end-use combustion of hydrocarbon fuels with CO2 uptake in the fuel supply system (as for drop-in biofuels) or with sequestration at other locations upstream from fuel supply (e.g., CO2 enhanced oil recovery).“Factor Analysis of Greenhouse Gas Emissions from Automobiles”

Carbon intensity is an abstraction of complex supply systems rather than an observable property of fuels (physical energy carriers) themselves...carbon intensity is not directly measurable. Carbon intensity is not the same as chemical carbon content; the latter may be included when estimating the former, but not always.

—John DeCicco

There are numerous complications surrounding fuel system GHG impacts, with problems identified in recent studies including: verifying carbon intensity through complex energy distribution systems is difficult for many fuels including electricity; quantification of key impacts through LCA [lifecycle analysis] is overwhelmed by uncertainties; and available analytic tools are inadequate for providing reliable results.

Although LCA-based “carbon footprints” are widely discussed and fuel carbon intensity has recently become an object of regulation, this factor is the most analytically challenging yet ultimately the most critical aspect of the car-climate problem.

—“Factor Analysis of Greenhouse Gas Emissions from Automobiles”

DeCicco suggests that these problems arise when policies target fuel choice, and that these issues could be avoided by recognizing that fuel-related GHG emissions are best addressed by policies that target the locations where GHG impacts actually occur.

Though obvious when so stated, this precept is obscured in discussions that invoke LCA to reduce complex system impacts to a “carbon footprint” that is then treated as if it were a fuel property. Such thinking fosters a misguided emphasis on changing the motor fuel rather than managing carbon and greenhouse gases in the associated energy and natural resource sectors.

—“Factor Analysis of Greenhouse Gas Emissions from Automobiles”

DeCicco then argues for a source-focused rather than a product-focused analytic framework. Lifecycle analysis is a tool for analyzing product systems, and so is product-focused. In contrast, DeCicco writes, a source is simply a specific entity from which GHGs are emitted, and so a source-based approach focuses on the locations where emissions occur.

DeCicco suggests that the net GHG emissions impact of transportation fuel use can be addressed in three ways:

Use physically carbon-free fuels, such as electricity or hydrogen, that avoid the release of CO2 from vehicles themselves. This requires low GHG fuel production systems and therefore policies directed at GHG emissions in the electric power sector and other related energy and industrial sectors.

Prevent the release of CO2 from combustion or other utilization of carbon-based fuels in vehicles, e.g., by using hydrocarbons with onboard CO2 capture or using only the hydrogen and separating the carbon for removal. Such options face very adverse thermodynamics and practical ways to implement them are not known.

Clarifying that it is not the fuel (i.e., end-use energy carrier) that matters, but rather the systems that produce it, implies...addressing GHG sources and sinks in fuel supply sectors rather than on fuel choice in the transportation sector. This is true whether the fuel is literally carbon-free (electricity or hydrogen) or is chemically carbon-based (hydrocarbon or alcohol). The extent to which a shift from carbon-based to carbon-free motor fuel is needed then reduces to an economic question, rather than being scientifically necessary for climate protection. The role of biofuels similarly reduces to an economic question, pertaining not only to the cost of synthesizing biofuels compared to fossil fuel products, but also—and most importantly—to the cost of achieving net CO2 uptake in the biosphere.

Therefore, in addition to travel demand reduction and vehicle efficiency, the “third leg” of auto sector climate policy should be reducing the net GHG impact of fuel supply sectors. Given the overwhelming dominance of liquid hydrocarbons, the most timely steps will entail GHG management for the petroleum sector. Because liquid fuels, crude oils and other feedstocks are fungible, globally traded commodities produced by dynamic supply chains, developing appropriate GHG tracking protocols and policies to manage and offset the large flows of carbon through this system is an important research need. While it may be informative at a general level, LCA is unsuited for this type of environmental management task.

A final implication is that, beyond fundamental R&D in hope of breakthroughs, policies to promote AFVs are not currently warranted for climate protection. Though they may become useful someday, which alternatives will be needed and when cannot be ascertained today. Questions of whether promoting AFVs for energy security and trying to replace petroleum rather than manage its risks are worthwhile endeavors are not addressed here. What is clear is that auto sector GHG emissions cannot be adequately limited without concerted efforts to limit net GHG emissions from the sectors that supply motor fuel, whatever form that fuel may take.

—“Factor Analysis of Greenhouse Gas Emissions from Automobiles”

Resources

DeCicco, John M. (2012) Factor Analysis of Greenhouse Gas Emissions from Automobiles. Available at SSRN